Company Tax Revenue Slumps 31% to N1.37tn Amid Tough Business Environment

By Adedapo Adesanya

The revenue from company income tax (CIT) fell by 31.05 per cent in the last year, according to the latest data by the National Bureau of Statistics (NBS), in its first quarter (Q1) CIT report, amid an increasingly difficult operating environment for businesses in the country.

The data showed that revenue from CIT plunged to N1.37 trillion from N1.98 trillion generated in Q1 2025.

On a quarter-on-quarter basis, it also fell by 8.08 per cent from N1.49 trillion realised in Q4 2025.

The report also showed that revenue from value-added tax (VAT) rose to N2.42 trillion, an increase of 17.06 per cent from N2.06 trillion recorded in Q1 2025.

On a quarter-on-quarter basis, it also increased by 9.98 per cent from N2.2 trillion recorded in Q4 2025.

The stats office reported that domestic CIT contributed N538.91 billion, while foreign CIT payment accounted for N828.82 billion during the quarter.

In terms of sectoral shares, the activities with the largest shares were financial and insurance activities with 24.73 per cent, mining and quarrying with 16.06 per cent, and manufacturing trailed with 13.82 per cent.

Revenue from CIT has been fluctuating in recent times owing to the harsh economic environment that has seen businesses either scaling down their operations, relocating from the country or shutting down completely.

In Q4 2025, CIT revenue stood at N1.49 trillion, representing a decrease of 49.81 per cent on a quarter-on-quarter basis from N2.96 trillion recorded in Q3.

Although CIT recorded a growth in Q3 2025 with a marginal growth of 6.55 per cent, hitting N2.96 trillion above the N2.78 trillion received in Q2 2025, the expansion was driven by foreign payments, which contributed N1.75 trillion, while domestic CIT was N1.21 trillion.

Nigerian business continue to face a whammy of challenges despite bold steps to reform the economy under the Bola Tinubu-led administration. Despite the statistical improvements, many Nigerian businesses have yet to fully benefit from the reforms due to rises in operational costs.

Recently, the Manufacturers Association of Nigeria (MAN) raised concerns that the rising operational burden also contributed to significant job losses across the sector, with over 18,900 jobs affected during the review period.

The liberalisation of the foreign exchange market also produced mixed outcomes for manufacturers. While the unification of exchange rate windows sought to improve transparency and eliminate market distortions, the rapid depreciation of the Naira sharply increased the cost of imported industrial inputs.

The exchange rate moved from about N463 to the Dollar in June 2023 to N899 by December 2023 to around N1,600/$1 before moderating to around N1,363/$1.